Weekend Analysis by Amateur Investors By: Amateur Investors | March 31, 2018
The 5 Day Average of the Put to Call Ratio reached the 1.25 level this week. Since the 2009 low each time the 5 Day Average of the Put to Call ratio has reached the 1.25 level bottoms have occurred within a day or two in the last "4" cases (points A). The only exceptions were in August 2011 and May 2010 where it took longer before a bottom occurred (points B).
Meanwhile the S&P 500 has been holding support at or above its its 200 Day Moving Average (green line) once again. If the S&P 500 were to break below its 200 Day Moving Average the next level of support would be at the February low of 2533 (point C).
The worst case scenario would be for a drop back to the 2467 area which is the 38.2% Retrace from the early 2016 low to the recent high.
Finally if the S&P 500 has put in a short term bottom a rally up to the 2743 to 2760 range is certainly possible. 2743 is the 61.8% Retrace while 2760 is along the downward trend line (black line).
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